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Ahead of oral arguments set for April 16 in the appeal of the lower-court decision in a lawsuit challenging the NCUA's field of membership (FOM) rule, the American Bankers Association (ABA) has filed a new brief arguing that credit unions engage in redlining. NAFCU, CUNA and CUNA Mutual filed a joint amicus brief in the case.

NAFCU has repeatedly highlighted that credit unions have not engaged in the illegal and discriminatory practices of banks, including redlining, because credit unions were established to offer provident credit to any member in their field of membership. Considering credit unions already work so hard to serve their communities, NAFCU has strongly opposed all efforts to extend the Community Reinvestment Act (CRA) to credit unions.

In its new brief, ABA claims that the NCUA's 2016 FOM rule "gives credit unions complete freedom to deny service to all or any part of the urban core of the communities that they serve." NAFCU supports the NCUA's FOM rule because it would allow credit unions the flexibility to provide provident credit to more Americans.

In March 2018, the U.S. District Court for the District of Columbia upheld two challenged portions of NCUA's FOM rule and struck down two provisions in a lawsuit filed against the agency by the ABA. The NCUA appealed the decision in May and ABA cross-appealed in June. More information on the issues the NCUA and ABA plan to address during the appeal can be found here.

The provisions declared to exceed the NCUA's statutory authority include those that automatically qualify a combined statistical area (CSA) with fewer than 2.5 million people to be a local community and the increase to 1 million people the population limit for rural districts. The court's decision led to 43 credit unions reverting their new FOM charters.

NAFCU continues to defend credit unions against bankers' attacks related to field of membership concerns and urged the NCUA to continue efforts to modernize FOM rules in its letter on 2019 priorities.